Diversity Under New Governance: Corporate Responses to Illinois’ Board Diversity Disclosure Law

• In Event: Gender and Race at Work

Abstract

Legislative attention to board diversity continues to grow as policymakers seek to expand access
to top organizational positions for women and members of other underrepresented groups.
Unlike earlier policies that relied on command-and-control tools such as quotas, recent reforms
use disclosure-based approaches that require firms to report on board composition and diversity
policies, reflecting a shift toward New Governance regulation. This paper examines how
corporations respond to such laws, drawing on the Illinois Board Diversity Disclosure Law,
which requires Illinois-headquartered firms to annually disclose the gender and racial
composition of their boards and to describe efforts to increase board diversity. Analyzing 548
board diversity reports submitted by 135 firms between 2020 and 2025, we identify three
organizational responses to the law: compliance, redefinition, and avoidance. Most firms respond
by reframing diversity in terms of skills, experience, and perspectives rather than in racial and
gender representation, or by adopting approaches that allow them to avoid meaningful
engagement with the law. Firms avoid the law by invoking prior legal frameworks, such as Equal
Employment Opportunity law, to legitimize their non-compliance with the current law; some
avoid compliance more directly by withholding information required by the law. Substantive
compliance with the law’s goals is rare. Moreover, firms show little change in their responses
over time, and movement toward compliance remains limited. Overall, our findings show how
disclosure-based policies can lead firms to treat New Governance laws as pressures to navigate
around rather than mandates with which to comply. This study contributes to research on legal
compliance and to scholarship on the growing use of disclosure requirements in public and
private regulatory regimes.

Authors

• Megan N. Bergman, University of Illinois at Urbana-Champaign

• Eunmi Mun, University of Illinois at Urbana-Champaign